When it comes to the next big thing, Richard Ogle, author and chief scientist at KnowledgePassion, discusses how network science could transform innovation and creativity.

In today’s digitally-driven, globalised business environment, the pace of change is so rapidly increasing that 'innovate or die' is the new mantra of business firms large and small. Innovation is, of course, a huge topic but breakthrough can come through network science insights.

By breakthrough innovation I mean the successful introduction into the marketplace of a product or service that marks a clear break with the past, while simultaneously opening up a new future full of potential growth and transformation. Napster, the iPod and iPhone, the Flip camera, YouTube, Nintendo Wii…these are game-changing products.

Napster, for example, started out as a program invented by Shawn Fanning in his college dorm room to make it easier to share music files with his friends. In just a few months, however, its user base had mushroomed to over 38 million and (as Time succinctly put it) the music industry found itself staring into the dark void of a post copyright economy.

In the same way, YouTube has completely changed some of the central tenets of the broadcast media industry. Ask any television executive about the future of shows funded by 30-second commercials.

So where does network science – a branch of complexity science – come in? Network concepts such as emergence, non-linear growth, tipping points, and so-called ‘small worlds’ can all be found at work in examples of creative breakthroughs.

"In certain cases, a product comes along that has such a good fit with market needs that it easily overcomes the disadvantage of being late."

What is network science?

Network science is a sub-domain of graph theory focusing especially on dynamic non-linear effects, hence its connection with complexity studies. Pioneers in the field, which is just over a decade old, include Albert-László Barabási, Steven Strogatz, and Duncan Watts. Malcolm Gladwell’s book The Tipping Point discussed several network effects, although in an essentially non-technical way. Barabási’s work is especially important, since it focuses on the crucial role played by hubs (highly interconnected nodes) in shaping the self-organising dynamics of networks.

For example, easy to use though YouTube is, it hardly constitutes the kind of radically innovative programming exemplified by the early days of the digital revolution. Rather, the breakthrough lay in its conception and subsequent emergence as one of the most influential forms of digitised visual media. Soon after YouTube was acquired by Google for an astonishing $1.6 billion, analysts began asking themselves why they hadn’t seen a service like it coming. Why indeed? In fact in some ways it’s hard to see why it wasn’t thought of sooner, as one of the earliest products of Web 2.0.

Like Web 2.0, YouTube emerged from the interconnection of several broad, post-‘dotcom’ trends: social networking, user-generated content (including blogging), increasingly available broadband access, digitally-enabled popularity enhancement, and good old fashioned viral marketing. We can think of these trends in network terms. Each can be interpreted as an ‘idea-space’: an integrated set of ideas, standards, practices, technologies etc, employed by a broad, diversified set of social groups. Each had its own roots. Social networking, for instance, goes back to the earliest days of the internet. But they all became increasingly interconnected, forming an extremely powerful set of closely linked hubs.

Here’s where network science starts to kick in. Barabási, in his groundbreaking book Linked: The New Science of Networks (Perseus 2002), formulated the principle that “the fit get rich.” According to Barabási, this operates through another principle he calls “preferential attachment.” Normally, preferential attachment works on the basis of time: the earlier a hub is in place, the more likely it is that nodes will attach to it. In the case of commerce, this is evidenced by the well-known ‘first mover’ advantage, in which the first product to market tends to be the most successful one (i.e., customers preferentially ‘attach’ to it).

However, in certain cases, a product comes along that has such a good fit with market needs that it easily overcomes the disadvantage of being late. Quicken, for example, was the 43rd personal accounting software to appear, yet it was so easy to use that it quickly became the best-selling product, going on to expand the overall market for such products a hundred-fold.

YouTube, whose exponential rate of growth easily surpassed that of other Web 2.0 services such as MySpace, formed a bridge between the new world of user-generated, socially networked digital media and the old one of passive consumption of television, movies, home videos and the like. The fit was a good one – a nearly century-old tradition of visually-based entertainment and information becoming integrated with the latest interactive digital media, leading on to rich financial and popularity rewards.

Impacting other worlds

YouTube has not only turned the old media world upside down, it has also begun to profoundly impact other worlds: witness the effect in the US presidential primaries of the Reverend Wright tape or Hillary Clinton’s gaffe about landing in Bosnia under fire. As a network hotspot like YouTube continues to grow, we can expect further unanticipated effects to emerge from its contact with other worlds.

Nintendo’s Wii video game console is similar, in some respects, but also slightly different. When it was launched late in 2006, many analysts predicted it was unlikely to move Nintendo out of third place behind the Sony PlayStation 3 and Microsoft Xbox 360. How wrong they were! To date, the Wii has sold over 20 million units worldwide, becoming the sales leader of its generation, according to the Financial Times.

For years, the video-game industry had tried to break out of the narrow demographic of young males between the ages of 8-25. Nintendo succeeded where others failed, appealing to male and female, young and old. How did Nintendo pull off this breakthrough? Put simply, it created a ‘weak tie’ (a link between entities with few other shared connections) to the world of physical games, which the Wii allows users to simulate using its unique remote control wand.

This leap to another idea-space brought into play a principle of network dynamics I call the law of hotspots. This states, roughly, that the transformative impact of a hotspot (a dynamic, highly interconnected hub/idea-space) is a function of fitness, times distance. The cultural hotspot of physical games shared few links with the world of video games but as Nintendo foresaw, there was a fit. A large, broad-based market segment was being left unaddressed, ranging from overworked baby boomers who wanted to play their favourite sport at home to nursing home residents with restricted mobility. The result was not only an astounding rate of growth, but also a tipping point in which the fundamental nature of the videogame industry is being transformed.

Conventionally, we talk about viewing creative breakthroughs in terms of ‘thinking outside the box.’ In reality, as the success of YouTube and the Wii demonstrate, the trick is to find a more powerful box (a networked idea-space) that through its dynamic web of connections can transform the space you’re stuck in.

As network science uncovers more laws and principles, we can expect it to continue transforming our conception of innovation and creativity in some surprising new ways.